Samsung Display Likely Seeks New Screens from Corning Deal

Samsung Display Co. is expanding its partnership with glassmaker Corning Inc.in a deal that could secure future supplies of a key material in bendable, next-generation display screens.

Displays are typically made from sheets of glass and have become an important feature of tablets, smartphones and an emerging breed of wearable gadgets.

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Samsung Display, which makes screens for Samsung Electronics Co.’s Galaxy smartphones, tablets and television sets, holds 43% of a joint venture with Corning that makes liquid crystal display glass. The partners on Wednesday revealed a two-part deal that allows Corning to take over the joint venture while Samsung Display invests $1.9 billion in new Corning convertible preferred shares.

Corning already supplies the glass used as a back panel for screens in Samsung Electronics’ television sets and mobile devices, but the joint venture has so far focused on glass for TVs. Corning has stuck to making its more profitable Gorilla Glass in-house, leaving the joint venture with excess production capacity.

The American company said buying half of the business it doesn’t already own will allow it to sell screen materials to more customers. In exchange, Samsung secured a 10-year supply agreement for the unit’s LCD glass.

It also struck a research agreement with Corning to develop new uses for its specialized glass. Analysts say the research and development pact suggests Samsung Display may seek to source more durable and flexible tempered glass that is used as a cover for screens on mobile devices.

Samsung Electronics already uses a type of tempered glass, branded as the “Gorilla Glass” by Corning, in some of its smartphones, including the Galaxy Round, which has a concave body with a screen that has curves running on both sides of the phone. It is also using the glass on the company’s latest smartwatch, the Galaxy Gear.

Samsung Electronics has been increasingly eyeing devices with flexible screens.

Corning has a product called Willow Glass, which it says has greater flexibility and strength that will allow displays to be wrapped around a device.

But analysts say the new types of tempered glass, such as the Willow Glass, aren’t fit for displays that are completely flexible.

“There’s a limit to how flexible the glass can be, as they can’t be folded,” said Jae H. Lee, an analyst with Daiwa Securities in Seoul.